These days you don’t have to be a millionaire to own your little piece of heaven says Paul Torrisi
Daily Mail, UK, 7.3.2008
ONCE the exclusive preserve of the rich in search of a tropical status symbol, island ownership is now a thriving global business from Scotland to Brazil, with some price tags easily comparable to an average holiday home. The benchmark for privately owned islands has long been Necker, Richard Branson’s 74-acre Caribbean paradise in the Virgin Islands. It cost Branson £180,000 in 1979, and today it’s worth a reputed £55 million — albeit after he spent around £5 million turning it into an upmarket resort. In the past ten years, buyers and speculators have joined the island craze in unprecedented numbers: in the Caribbean, the values have risen by 300 per cent.
But according to Germany-based broker Farhan Vladi, the boom is over. ‘With the credit crunch, normality is returning,’ he says. ‘It was overheated. People had no sense of values.’ Vladi started his island business 30 years ago and has around 12,000 islands on file. He still spends three months a year scouting out new territory. ‘In the early days, my clients wanted islands in the Indian and Pacific Ocean, or the Caribbean,’ he says. ‘Now there is a much wider choice. The mystique has gone. With Google Earth (the online satellite search program) and cheap flights, everywhere is instantly accessible.’ Prices in the ‘habitable’ market roughly break down as follows (since every island is a one-off, there are lots of exceptions): Caribbean and the Med (£1.5 million to £38 million); East Coast of U.S., Scotland, Ireland, Brittany coast (£750,000 to £3.8 million); Australia, New Zealand, Fiji, French Polynesia (£500,000 to £4 million); SouthAmerica (£250,000-£1.5 million); Canada, Norway, Scandinavia, Central America (£50,000 to £1.5 million).
Buying an island is not like buying a house, says Vladi. ‘There is an emotional attachment.I had two buyers for a Scottish island, and the vendor sold it to the person he liked the most although it was for less money.’ It is important not to lose your head over a paradise hideaway. A good company will do a thorough investigation on any location to establish accessibility, habitability, building permission, fishing and agricultural rights, spaces for parking (boats and cars), proximity of hospitals (90 minutes away should be a guide), drinking water, sanitation and energy.
It is also important to understand local laws, from property ownership to building regulations. Governments can be possessive of sovereign territory. When Richard Branson bought Necker, he was given five years to develop the island into an income-based investment or the title would revert back to the government. Wherever you buy, your overall budget must take into account the extra costs: legal charges are likely to be higher than with a simple land purchase. And there will be running costs: for example, the Bahamian government charges 2 per cent of the purchase price in land taxes per annum. Unless you are guided by an expert, it is impossible to establish the realistic price of an island.
A remote island for sale on a river in Bahia, Brazil, about 50 miles north of Rio, has around 12 acres, is accessible only by boat and is for sale at £115,000. Go north 4,500 miles to Lake Nicaragua and you will find the private island of El Blanco, with a stone-built property and power installed, on the market for £39,500 (see www.viviun.com Real_Estate/Nicaragua/Islands). El Blanco is part of an exclusive private island community. Canada’s islands, usually found within the country’s large freshwater lakes, are thriving communities, too, for those fond of hunting, fishing and woolly jumpers — and are good value, with the exchange rate at three dollars to the pound.
Vladi’s latest tip is also a wellestablished community: in the islands off the Norwegian coast in the large area between Oslo and Molde. ‘It is absolutely beautiful,’ says Vladi. ‘The winter is harsh, but for summer use it is perfect.’ A 20-acre island with a property on site will cost from £50,000 — as opposed to ten times that for one off the coast of Scotland. Another advantage is there is a strong local market when you resell. These days, buyers need to consider the effects of climate change, and how high their island is above sea level, although Vladi thinks such worries can be exaggerated. ‘I have an island in New Zealand that goes to 300m above sea level,’ he says. ‘The lowest island we have is 2.5m. If the sea rises as much as some people say, we should be more worried what is going to happen to Hamburg.’
